Hunt for Huawei deal mole

No10 orders Cabinet ministers and aides to hand over phones in leak investigation

CABINET ministers will be hauled before a leak inquiry this weekend after Theresa May’s hunt for the source of information on the Huawei affair gathered pace yesterday.

Gavin Barwell, the Prime Minister’s chief of staff, warned that if a leaker was discovered they would be sacked, regardless of their rank.

He chaired a meeting of ministerial aides in Downing Street and told them that anyone found to be responsible for the leak “will not be a member of the Government for much longer”.

The formal stage of the investigation began yesterday as ministers and their staff were issued with questionnaires that demanded to know their whereabouts in the hours following the National Security Council meeting on Tuesday night at which Mrs May approved the Chinese firm’s involvement in Britain’s future 5G mobile network.

Ministers and aides were also asked to provide details of all mobile phones in their possession and whether they spoke to The Daily Telegraph before this newspaper broke the Huawei story on Wednesday.

Ministers including Philip Hammond, Jeremy Hunt and Sajid Javid will be expected to hand over their mobile phones as part of the investigation being conducted by Sir Mark Sedwill, the Cabinet Secretary.

The US State Department yesterday put further pressure on Mrs May to change her mind by asking for one of its staff to give a briefing to British officials on Monday. Separately, sources close to Boris Johnson, the former foreign secretary, indicated he could “look again” at the Huawei decision if he became prime minister.

Mrs May ordered a leak inquiry after this newspaper reported that she had decided to allow Huawei to bid for “non-core” 5G infrastructure, despite objections from ministers including Mr Javid, Mr Hunt, Gavin Williamson, Liam Fox and Penny Mordaunt.

Sir Mark gave all of the ministers who attended the NSC meeting a deadline of yesterday afternoon to agree to comply with his investigation. The Telegraph understands that all of those who attended the meeting – who also included Mrs May, David Lidington, Greg Clark and Jeremy Wright – agreed to Sir Mark’s demands.

Whitehall sources said interviews with the ministers would take place “over the course of the weekend and early next week”. Sir Mark is not expected to conduct the interviews himself, instead leaving it to government security officials to gather evidence.

Sources familiar with previous leak investigations said that by agreeing to comply, ministers and staff had effectively given permission for Sir Mark’s team to examine the call history of their mobile phones, along with messages sent by text, Whatsapp and other means. Emails will also be examined before oral interviews are conducted with staff if deemed necessary. Mrs May has not called in police.

Criticism of the Huawei decision continued yesterday, as Gen Jonathan Shaw, former head of cyber-security at the Ministry of Defence, said it had “profound” security implications. “We are facing a new technological Cold War between China and America, and America has asked us to choose,” he told LBC.

Surely all of us had the fantasy at some point? As soon as we left the room, part of us thought that maybe, just maybe, our lifeless Playmobil cowboys and My Little Ponies started communicating secretly with each other, only to look totally unchanged when we returned.

One way of thinking about the impending era of 5G mobile networks is that it is a really dreary version of the same thing. In five or 10 years’ time, objects that are now “dumb” will become “smart”. By that, tech geeks mean that everything from traffic grids to industrial robots is going to be loaded with sensors, connected up and managed efficiently by software.

The row over the Chinese telecoms giant, Huawei, is essentially an argument about who should build this network and how to manage the trade-offs between security, cost and economic policy. That our Government has briefly managed to turn this important debate into a leak inquiry tells us more about its inept policy management than about the issues at stake. The basic question is whether the UK should agree to outsource the construction of critical infrastructure to the national corporate champion of a mercantilist, totalitarian state. The obvious answer should be “no”.

In response to Huawei’s stunning growth (sales quintupled to $107billion in nine years), the US has led an aggressive campaign against the company. Using its kit, it warns, will give Beijing a backdoor to turn off our electricity grids or phone networks.

Despite this week’s leak, we don’t yet know exactly what Government policy is. The decision isn’t black and white. Perhaps the UK could allow Huawei to supply the “dumb” edges of a new network, like antennae, but lock it out of the core – though the US argues that this will be impossible in fully “smart” 5G networks. Perhaps Britain could tactfully design its 5G specifications in a way that effectively excludes Huawei, without being explicit. This seems to be what Germany is planning, so far to the

satisfaction of both the US and China.

The biggest argument in Huawei’s favour is that it is extremely cheap. It undercuts rivals by 10 to 25 per cent and is substantially further along than anyone else in developing complete 5G networks. The US’S strict limits on Huawei mean American companies and consumers pay through the nose for mobile services. Hence, the pure numbers types, like Philip Hammond, argue that letting in Huawei is the quickest, cheapest way to accelerate our economic development.

Another complication is that much of Britain’s existing infrastructure already relies on its kit. Forcing Vodafone and Three to strip this equipment out of their core networks, as BT is doing, could cost them over £1billion each and massively delay 5G. It is not true, however, that there are no alternative suppliers. Huawei accounts for 28 per cent of the market. European and American companies like Ericsson, Nokia, Ciena and Cisco are all developing 5G products. They are just more expensive.

This raises the question of whether the US campaign against Huawei is really just a form of protectionist bullying or even war-mongering. Both the US and Europe, having each at times led the field in telecoms, have manifestly failed to invest in academic research and infrastructure, protect their companies from technology theft or develop innovation-friendly policy. The US is keenly aware that its technological lead is narrowing. Its 4G success was vital to the growth of the world’s top 10 tech companies, like Apple and Amazon, all of which were American a decade ago. Now, four are Chinese. Whoever can develop and export 5G fastest will also export their technology standards and open up opportunities for their companies.

The case for Huawei would be convincing if it were an entirely normal foreign company. The problem is, it isn’t. Its founder, Ren Zhengfei, used to work for China’s military and the US claims that the whole operation is a disguised arm of the Chinese state. Huawei hotly disputes that claim, saying it’s fully employee-owned and has outcompeted its state-owned rivals. But you don’t even have to believe the US’S theory to worry about what exactly Huawei’s status is.

Chinese law states that all companies in its jurisdiction must help its security services. Its legal norms make no hard distinction between the state and private enterprise and have no notion of privacy or individual rights. And devices like CCTV cameras made by Chinese firm Xiongmai and an entire Huawei-built city surveillance system in Pakistan have been found to contain either security “backdoors” or wide-open Wi-fi access, whether installed deliberately or through sloppiness, we don’t know.

As one anonymous Huawei staffer recently told the LA Times: “The state wants to use Huawei, and it can use it if it wants … Everyone has to listen to the state. Every person. Every company and every individual, and you can’t talk about it. You can’t say you don’t like it. That’s just China.”

British intelligence officials have so far been dismissive of the espionage threat. GCHQ currently dismantles and examines all Huawei products before they enter the UK market. Where our spooks have voiced concerns, they focus on quality. GCHQ man Ian Levy says Huawei software is so “shoddy” that it’s wide open to security breaches and could easily collapse. Other engineers claim its software operates at “1990s” levels of security and argue its kit appears cheap and fast because it’s free of basic security measures. The company itself admits it has a software problem.

So far, these security holes look accidental, perhaps as a result of Huawei’s lightning-speed expansion. The US hasn’t managed to produce a “smoking gun”. It’s also hard to find a global tech company whose hardware supply chain doesn’t at some point pass through China, meaning that all their equipment is in theory vulnerable to being compromised if Beijing fancies it.

Still, there is a difference between a company based in a liberal democracy, subject primarily to the influence of governments that are Britain’s historic allies, and one operating under a regime whose values we fundamentally oppose. Britain should certainly be open to trade and cultural exchange with China, but letting its most powerful company build core parts of our entire communications network would be an act of selfdestruction bordering on madness. As a test of China’s attitude, ask yourself whether Beijing would ever allow a Western company to build its telecoms network. The answer, of course, is never in a million years.

An entire Huaweibuilt city surveillance system in Pakistan has been found to contain security backdoors